INVESTMENT IN CLIMATE CHANGE PROJECTS CRUCIAL
Promises need to quickly be transformed into projects that bankers can sink trillions of dollars into
investment looks like – is key to shifting billions into climateprotecting efforts, he and others said.
“We’re confident the money is available at the scale we need it,” said Ed Wells, a sustainability expert and head of global markets policy at HSBC Bank in London.
Right now, “the supply of projects is what’s short, not the supply of money”, he said.
To kick-start a bigger pipeline of investment-friendly climate projects, international bankers and officials from Mexico, Nigeria and Colombia are meeting in London this week to try to thrash out a first set of ready-to-fund climate projects.
Vietnam is also participating in what’s being called the Climate Finance Accelerator effort, though as an observer.
The aim is to smooth obstacles in the way to getting funding flowing, and give country officials the chance to hammer out a template for finance-luring projects that can be replicated at home – and potentially used by other countries as well, Dodwell said.
“You can’t green the whole world at the same time. Let’s start with the four countries here today,” he said at the launch of a weeklong effort at the London Stock Exchange.
Juan Carlos Arredondo, who works on climate change policy for Mexico’s environment and natural resources ministry, said his country needs about $135 billion to meet its aim of reducing emissions by at least 22 percent below expected “business as usual” levels by 2030.
That would pay for things such as shifting the country to electric vehicles – including Mexico City’s huge fleet of taxis.
Colombia wants to protect its Andean water supplies, get farmers better climate information to keep growing in harsher conditions, protect forests and make the country’s energy supply and transport systems cleaner.
But “we realise that with only public finance we won’t be able to meet our commitments”, said Lina Marcela Penuela, of the country’s Ministry of Environment and Sustainable Development.
Making the kind of changes needed around the world could cost $90 trillion, said Roger Gifford, chair of the Green Finance Initiative, an effort to make London a leader in climate-friendly lending and investment.
But Wells, of HSBC, said twothirds of that is already potentially available, in the form of private investment looking for good projects.
“Most of the money is there if we can just create the structure to let it flow,” he said.
Political and market changes – from ever-cheaper solar energy to announcements by countries such as China and France that they will rapidly phase out petrol and diesel vehicles – are helping more investors and bankers see opportunities in a green shift, Wells said.
“Financing the transition to the low-carbon economy is possibly the biggest opportunity (HSBC) has ever faced,” he said.
More investors also are insisting on knowing the climate-related risks faced by companies they back, said Stephanie Sfakianos, head of sustainable capital markets at BNP Paribas.
As realisation of those risks grows among investors and bankers, “it’s a game changer” in terms of where money will flow, she said.
With a string of hurricanes slashing across the Caribbean and the US, and cities from Houston to Mumbai recovering from flooding, climate risk is increasingly easy to see, the experts said.
“Anyone who switches on the TV at the moment feels like they’re in a climate disaster movie,” Dodwell said.
“What are we going to do about it?” he asked. “The best chance is the implementation of the Paris climate agreement... but we’ve got to speed things up.” – Thomson Reuters Foundation
Most of the money is there if we can just create the structure to let it flow